Airlines slash flights across globe as demand crumbles

Bloomberg

The airline downturn reached new levels as carriers from American Airlines Group Inc to British Airways parent IAG SA slashed schedules and braced for a drought that could last for months.
American will pare long-haul international flights by 75% — the biggest reductions to date by a US-based carrier — because of the collapse in travel demand and government restrictions imposed to slow the spread of coronavirus.
Delta Air Lines Inc and United Airlines Holdings Inc further reduced schedules, while IAG fell 23% after saying it will cut capacity by at least 75% for the next two months and freeze hiring. The Bloomberg EMEA Airlines index sank 16%.
The actions reflect the increasing severity of the downturn that has pummeled airlines worldwide as the virus spreads and travel restrictions expand. White House officials are discussing temporarily allowing cash-strapped carriers to keep some taxes and fees they collect from passengers. Separately, Sydney-based CAPA Centre for Aviation warned the pandemic may bankrupt most airlines worldwide, and many have probably been driven into technical bankruptcy or substantially breached debt covenants.
Fallout from the outbreak is sparing few airlines anywhere. President Donald Trump extended a temporary ban on some flights into the US to include those from the UK and Ireland, pulling more airlines into the bedlam.
At IAG, where outgoing IAG CEO Willie Walsh will delay his retirement, the company said it can’t accurately predict full-year profit. The shares fell 23% while big trans-Atlantic carriers Deutsche Lufthansa AG and Air France-KLM , dropped 14% and 19%, respectively. EasyJet Plc fell 29% after rescinding its earnings forecast.
Air France-KLM Chief Executive Officer Ben Smith said he would take a 25% cut in his compensation to help cut costs. The carrier has asked the French and Dutch governments, who hold stakes in the company, for support and has further slashed fights at Air France and Transavia by as much as 90%, he said.
In Australia, Qantas Airways said it plans a fourth round of capacity cuts after the government forced anyone arriving from overseas to isolate themselves. The carrier has axed almost a quarter of its international flights for six months.
American was expected to cut service starting from Monday through May 6, the carrier said. The airline will continue to operate one flight daily from Dallas-Fort Worth to London, one daily from Miami to London and three weekly flights from Dallas-Fort Worth to Tokyo. The airline has an extensive partnership with carriers led by British Airways.
US capacity will fall 20% in April and 30% in May, both from a year earlier. American is suspending flights from New York, Boston, Chicago and Los Angeles to London’s Heathrow Airport over the next seven days.
Delta temporarily suspended service between Detroit and London from Monday and between New York’s John F Kennedy and Dublin on March 18, the carrier said. Delta already announced plans to reduce flying and seat capacity 40%, park 300 planes, suspend hiring and offer unpaid voluntary leaves.
United will reduce its capacity about 50% in April and May, deepening previous cuts, the company said.